Canon Q1 operating profit to fall, forecast to be cut

Canon will likely report an 8% fall in first-quarter operating profit and lower its full-year forecast, reflecting the impact from Japan's devastating earthquake, the Nikkei newspaper reported on Friday.

Canon, which competes with Sony and Nikon in cameras, was forced to suspend operations at its main camera factory on the southern island of Kyushu in March, due to a shortage of parts following the quake and tsunami.

Low operating rates at the firm's factories will likely continue through June, given low domestic demand and continuing supply woes, and profits are also being pressured by the strong yen, the Nikkei said.

Canon's January-March operating profit will likely come to about 80 billion yen ($977 million), down from 86.8 billion yen in the same period a year earlier, the newspaper said, without saying where it got the information.

Canon declined to comment on the report.

The company, which is scheduled to announce its earnings results on Tuesday, is also expected to lower its full-year forecast, which is for operating profit to rise 21% to 470 billion yen, the paper said.

The newspaper said Canon's 2011 profit is now expected to fall from last year, when it recorded an operating profit of 387.6 billion yen. Canon's business year runs from January to December.

The consensus estimate for full-year operating profit is 396.5 billion yen, based on six analysts polled by Thomson Reuters I/B/E/S since the March 11 disaster.

Macquarie cut its target price on Canon to 5,000 yen from 5,500 yen, but retained its "outperform" rating, saying that recovery could be expected from June.

Shares of Canon were down 2.3%, compared with a 0.5% fall in the benchmark Nikkei average ($1 = 81.845 Japanese Yen)